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Africa has all the makings of the world’s
cleanest economic revolution. By leveraging renewable energy sources to
brighten an extensive stretch of urbanization, the continent’s sunshine is not
entirely going to waste. Even though the installations so far are less than
half of what’s in place in the UK, cleantech is playing a Jesus role is
supporting the region’s double-swelling
According to the International Energy Agency, renewables form
part of what will make industrialization in Africa a reality, over the next two
decades. In a
report released this November, the agency predicted a sun-enabled boom
in countries across the continent. This forecast could provide hundreds of
millions of African homes with clean electricity for the first time.
By now, it is understandable that
Africa’s hunger for energy will only continue to grow. But the IEA says it will
do so at double the rate of the global average in the next 20 years while it
unseats China and India as the world’s most populated region. The rise of 800
million people from today in 2050, will, for one, bring about a continent where
the demand for housing and infrastructure will give birth to a whale-sized
crave for energy. On the backs of the by-the-corner industrial revolution, that
energy is likely to be renewable.
The IEA report says Africa will lead the way in the global green revolution, an indication that comes with a series of significant deals by both indigenous and global investors. The volume and calibre of solar deals signed by companies and even governments on the continent stand more significantly above conventional startup deals. Even though tech startup deals shines in numbers, the cash pumped to solarise the continent are single units of substantialness, all of which prove that the sector is attractive.
Late September, a trio of world powers hatched a USD 350 Mn
investment in the renewable industry of Africa. The funds which came from
France, Netherlands and the United Kingdom is only a fraction of the USD 1 Bn
stash set up to possibly avail 17.5 GW of battery storage capacity by 2025. The
funding, which comes under the auspices of the Climate
Investment Funds’ Global Energy Storage Program, is a repeat of
the global community’s efforts to step up the power game in Africa.
WeeTracker’s exclusive with Mansoor Hamayun, CEO of Africa-focused utility firm BBOXX revealed that the Series D stage firm’s last USD 50 Mn funding as well came from three intercontinental investors. Japan’s Mitsubishi (Asia), France’s Engie Rassembleurs d” Energies (Europe) and Canada’s Mackinnon, Bennett & Company (North America), among others participated in the investment.
In August, Africa’s largest banking
threw USD 26 Mn into building 40 MW commercial and industrial
solar P.V facilities across South Africa. The deal, made possible alongside
African Infrastructure Investment Managers, was inked with an English solar
project developer known as SOLA Group. The
London-headquartered firm’s chairperson, Chris Haw, did say the partnership is
fed by three expert entities whose hands on deck is coming through for a region
in dire need of clean energy.
June this year, Nigeria’s solar solutions
raked in USD
9 Mn in growth capital. The Series A stage firm got the consideration from
Norwegian, French, Belgian and Canadian investors. Paris-based investor-led
energy investor Breakthrough
Energy Ventures who led the investment is backed some notables.
According to business intelligence platform Crunchbase, Bill Gates, Jack Ma,
Jeff Bezos, John Doerr and Vinod Khosla are behind the firm, which ties the
African solar sector to entrepreneurial warheads.
In an interview with WeeTracker, Abraham Cambridge, CEO and Founder of The Sun Exchange – a South African blockchain-based solar panel micro-leasing marketplace – admitted and emphasized that there is a lot of evidence that the rest of the world is being tipped by the solar opportunities available in the continent.
“That’s certainly a trend that we are
seeing on the Sun Exchange online platform, which is specifically designed to
enable people from anywhere in the world to own solar assets that power
business and organisations in Africa. Since launching in 2015, we’ve grown to
having a community of 9,000+ members across 140 countries. I would certainly
say that’s evidence that the rest of the world is taking note of the solar
opportunity in Africa,” Cambridge said.
African solar ventures are much like
those anywhere else in the world, but what is spectacular about it? For, Sakki
Van Dijk, Co-Founder and Director of Solarise Africa – a pan-African energy leasing company for solar
PV and other energy assets – it is because of a group of factors.
“Penetration is still very low, so there is a lot of room to grow. In most of the countries, grid prices are high and the demand is much more than what can be supplied. And, the grid is not reliable in some parts of the continent. All these coupled together makes Africa a perfect environment for solar investments,” Van Dijk told WeeTracker.
Solar companies offering subsistence-level energy to consumers with low means of income have brought about a vital basis for the development of the industry. Investors are putting their money into the off-grid rural market, and they are not wrong about the transformative impact of models that enables customers to repay the cost of a USD 200 entry-level solar system for example, over time. Such systems provide electricity for children to study at night and can better household health by significantly reducing the reliance on dirty fuels such as kerosene.
BBOXX’s Mansor Hamayun says the key driver of the rise of African solar energy alongside investments is the falling price of solar batteries and storage methods in combination with the uptake of mobile money. “This has made Africa the first market in the world where solar is now cheaper than other forms of energy for customers at a local level. The market has huge potential which has been recognised in recent months by the entry of strategic investors in the space, including Engie, EDF, Shell and Mitsubishi, which have all invested in BBOXX,” Hamayun explained.
Africa is one of the sunniest continents in the world, as 85 percent of its land received more than 2,0000 KW hours of solar energy per square kilometre every year. Also, up to 60 percent of the countries’ populated reside in the Sahara, and the neighbouring regions have little or no grid access. Many governments, like that of Mali, Egypt, Morocco, Senegal and even Nigeria are setting up millions of dollars in investments and energy as a basic necessity.
This is at the front of the line. In Morocco, for example, there is a solar project worth USD 780 Mn that will have a total installed capacity of 800 MW -m and be the world’s first advanced hybridization of concentrated solar power (CSP) and photovoltaic (PV) technologies.
The mobile money factor pointed out by
Hamayun is not out of place. Digital loans, challenger banks and payments
solutions are literally flooding the continent. From M-Pesa in Kenya to Fawry
in Egypt to PayFast in South Africa and OPay in Nigeria, the
mobile money revolution is a cosmic reaction waiting to complete.
With more Africans ditching cash, telcos
becoming banks and online payments becoming the thing nowadays, solar firms are
able to sell their products quickly and conveniently. Nowhere else in the world
moves more money in mobile phones than Sub-Saharan Africa, where solar is most
dominant. SSA currently boasts on 45.6
percent of mobile money activity in the world, whose transaction estimate is
at least USD 26.8 Bn in value for 2019 alone.
The Millenium Development Goals of the
United Nations promise to bring universal access to electricity by 2030.
Nevertheless, half of Africans lack access to energy, which is why Sub-Saharan
Africa has the lowest energy access rate in the world as electricity.
According to the IEA, clean cooking is
done by only one-third of Africa, while about 890 million people rely on
traditional fuels. Of the 1.2 billion people on the continent, 600 million lack
access to electricity to the World Bank. Due to the inconsistency or
non-existence of access to the grid, solar services in Africa have taken off as
almost 10 percent of African now rely on off-grid energy to light their living
The prices for solar panels and proper
battery technologies are skateboarding downhill, prompting PAYG system pioneers
like as M-KOPA, Rensource Energy and Series
C-stage PEG Africa to become the darlings of solar development in the region.
Small-scale solar providers focus on the rural off-grid market and have
generated ample amount of electricity to power more than just TVs and
Undoubtedly, such improvements are noteworthy, but there is room for them to embrace more comprehensive and robust potentials. The centrepiece of the powering Africa agenda is improving the quality of light, which requires a sustainable vision.
BBOX CEO, Mansoor Hamayun, reminds us
that overcoming energy poverty by providing access to affordable and clean
energy is Sustainable Development Goal 7. In his opinion, this is the key to
solving a host of goals which countries across the world have pledged to
advance. He told WeeTracker that BBOXX has scaled rapidly into new markets and
geographies by forging strategic partnerships with global companies, investors
and governments from developed as well as developing countries.
“The transition to clean energy is
crucial if we are to tackle climate change (SDG 13), thanks to the offset of
thousands of tons of carbon emissions. Electricity enables local businesses to
take off and acts as a trigger for economic growth and poverty alleviation, SDG
1. It is equally the entry point to other basic needs, such as clean water and cooking,
Further, as the cost of storing and
generating power at home comes down in comparison with the cost of transmitting
and distributing electricity through traditional grid networks, we believe that
developed countries will also want to diversify their distribution-mix. The
on-grid sector will have a lot to learn from Africa’s off-grid market which is
leapfrogging into this new reality.
According to Solarise Africa’s Van Dijk,
there are more challenges in Africa’s solar space than there are in other
continents. To explain, he points some of them out:
The Sun Exchange’s Abe Cambridge says it
is hard to quantify challenges in terms of fewer or more. There’s no question
that it can be tricky to navigate the policy and economic uncertainty of Africa
and other emerging markets. But on the other hand, the high levels of solar
irradiation across the continent make weather conditions much more consistently
ideal for solar power than many other parts of the world.
“It’s safe to say, however, that the
challenges to solar deployment in Africa and other developing regions are
unique and different from those of more developed economies, and require
innovative solutions designed to address those specific challenges. For
example, the main obstacle to deploying small-to-medium solar plants for
businesses and organisations in Africa is access to affordable and appropriate
Debt finance from banks is either not
available or not an attractive option because the cost of the debt is high.
Additionally, getting investments and payments into and out of emerging markets
like Africa has historically been costly, time-consuming and high-risk. At Sun
Exchange, our technology solution and business model are built to solve these
specific issues, enabling us to facilitate access to extremely affordable solar
power for business and organisations, as well as fast and secure cross-border
transactions,” he added.
Overcoming energy poverty through access to
affordable and clean energy is Sustainable
Development Goal 7 and is the
key to solving a host of goals which countries across the world have pledged to
advance, says Mansoor Hamayun.
“BBOXX has scaled rapidly into new markets and
geographies by forging strategic partnerships with global companies, investors
and governments from developed as well as developing countries. The transition
to clean energy is crucial if we are to tackle climate change (SDG 13), thanks
to the offset of thousands of tons of carbon emissions. Electricity enables
local businesses to take off and acts as a trigger for economic growth and
poverty alleviation, SDG 1. It is equally the entry point to other basic needs,
such as clean water and cooking, SDG 6.
Further, as the cost of storing and generating power
at home comes down in comparison with the cost of transmitting and distributing
electricity through traditional grid networks, we believe that developed
countries will also want to diversify their distribution-mix. The on-grid
sector will have a lot to learn from Africa’s off-grid market which is
leapfrogging into this new reality,” he concludes.
shows that innovation in urban areas
grows at the same pace as populations. This is because it increased more
opportunities for personal interaction and leads the way to the fortress of new
ideas. As a result, urbanities are ideal testing grounds, and directing
investments towards them can improve local resilience. There would be a
balancing of the overstretched power grids found in many African countries. It
would also facilitate nationwide energy efficiency.
In Africa’s most populous nation, the commercial nerve Lagos received 86 entrants every minute. The rate, which is 10 times that of New York, makes new settlements crop up. The rid is yet to pace with the scale of development, and that is almost the same case in other metropolitan hotspots across the continent.
In Lagos, for example, the cost of solar has gone down by 80 percent since 2010, making cleantech options become increasingly appealing to adopt and expand. When the expansion is doubled down on, it leads to a more commercially sustainable approach to achieving universal and reliable power for more Africans.
It would be easier to test solar solutions at a
larger scale in urban areas, albeit their innovation hub status. It is hard to
imagine a scalable power system being tested in a remote village. To distribute
and maintain these systems would be expensive, no thanks to infrastructural issues.
In such areas where the population is limited, piloting scalable systems would be cumbersome Nevertheless, the expansion of solar services in urban and peri-urban areas can subsidize the cost of expansion of such power in rural communities.
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